The USD remains strong on US economic outperformance, leading the desk to prefer selective shorts (AUD, CNH, BRL) over broad USD selling. Positive US-China trade developments support RMB strength, while political volatility in Brazil is seen as a buying opportunity for BRL.
Key Takeaways
- 1.The USD continues to strengthen due to US economic data outperformance and idiosyncratic factors in the UK and Japan, prompting a more selective approach to USD short positions.
- 2.Constructive US-China trade soundbites and a lower USDCNY fix suggest a PBoC bias toward RMB appreciation, with a target for USDCNH of 6.70.
- 3.Recent BRL underperformance driven by political scandals involving Flavio Bolsonaro is viewed as a positioning-driven flush that should be faded given solid macro fundamentals.
Table of Contents
- USD: Data Outperformance Continues – Supports More Selective USD Shorts
- CNH: Positive Headlines Consistent With Expectations
- BRL: Political Driven Stops – Look To Fade
- Meme Of The Day
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Authors
Matt Atherton
Securities
USDCNHBRLNVDA
Themes
US ExceptionalismUS-China Trade De-escalation
Regions
North AmericaAsia PacificLatin AmericaUnited StatesChinaBrazil